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Sirius Satellite Radio Battles Back

Techstination feature for Thursday, May 29, 2003

Sirius Satellite Radio battles back. Bloomberg Boot Camp, a report on today's technology. Sirius Satellite Radio... which competes with XM radio... is hoping new portable radios that can be used in both cars and homes will help it win new subscribers. The service has lured about 68 thousand customers... .compared to more than half a million for XM. Both have a long way to go before they make money... .but Sirius CEO Joe Clayton says satellite radio is here to stay...

"We believe we'll be cash flow positive from operations in the first half of 2005, Fred, and that's with about two million subscribers."

Subscribers who pay 12.95 a month for the service. Sirius will get a boost when Ford begins offering the service as an option in ten of its 2004 model cars. But Clayton tells us the plan for long term growth... is to have Ford, DaimlerChrysler and BMW... make the radios standard equipment...

"It's kind of an evolution of integrating this into the vehicle, Fred. You start with dealer installed options and then you migrate to a factory installed option. But the ultimate for satellite companies is standard equipment bundled with a one, two or three year subscription prepaid. And we are at various stages in that evolution."

Building satellite radio service into the price of a new car..will be the secret, says Clayton, to success. Rival XM's partners include General Motors and Honda. Bloomberg Boot Camp, I'm Fred Fishkin.